Correlation Between NETGEAR and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both NETGEAR and SBM Offshore at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NETGEAR and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and SBM Offshore NV, you can compare the effects of market volatilities on NETGEAR and SBM Offshore and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NETGEAR with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and SBM Offshore.
Diversification Opportunities for NETGEAR and SBM Offshore
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NETGEAR and SBM is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV and NETGEAR is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NETGEAR are associated (or correlated) with SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of NETGEAR i.e., NETGEAR and SBM Offshore go up and down completely randomly.
Pair Corralation between NETGEAR and SBM Offshore
Given the investment horizon of 90 days NETGEAR is expected to generate 2.27 times more return on investment than SBM Offshore. However, NETGEAR is 2.27 times more volatile than SBM Offshore NV. It trades about 0.21 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.14 per unit of risk. If you would invest 2,278 in NETGEAR on September 2, 2024 and sell it today you would earn a total of 182.00 from holding NETGEAR or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NETGEAR vs. SBM Offshore NV
Performance |
| Timeline |
| NETGEAR |
| SBM Offshore NV |
NETGEAR and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and SBM Offshore
The main advantage of trading using opposite NETGEAR and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, SBM Offshore can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SBM Offshore will offset losses from the drop in SBM Offshore's long position.| NETGEAR vs. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |